India sees trade with Pakistan within 1-2 yrs

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India sees trade with Pakistan within 1-2 yrs

 

 

 

By Nita Bhalla

 

PORT LOUIS (Reuters) - India said on Friday it hoped free trade with its nuclear-armed neighbour Pakistan would happen within one to two years, as their sluggish peace process moves forward.

 

Since the two stepped back in 2002 from the brink of what would have been their fourth war since independence from Britain in 1947, ties have warmed, but trade between the two countries has remained elusive.

 

"We can see trade between India and Pakistan happening in the foreseeable future," Sanjaya Baru, spokesman for the Prime Minister Manmohan Singh told Reuters.

 

"I don't see why it can't happen in the next year or two", said Baru, who is accompanying Singh on a visit to Mauritius.

 

Barriers to commerce cemented by more than a half-century of hostility mean companies selling everything from wheat to tyres to Pakistan are forced to make costly detours into countries like Afghanistan and the United Arab Emirates.

 

These indirect shipments are estimated to be at least six times greater than cross-border trade.

 

"From our side, we are fully prepared for a fast track trade openness with Pakistan and we've repeatedly said to Pakistan that we would like to see normal trade relations," said Baru.

 

He said one of the Pakistan government's concerns was that it would be flooded by Indian goods, but Pakistani businessmen on a recent visit to India seemed more concerned about the threat of Chinese goods.

 

"The commerce ministers on both sides have been talking to each other and more importantly, business men have been talking to each other," said Baru.

 

Trade is on course to rise more than 150 percent in the financial year which ended in March to about $500 million, but businessmen predict it could reach $10 billion within five years of signing a free trade agreement.

 

Businessmen say India could buy cotton yarn, vegetables and sports goods from Pakistan and sell everything from tea to steel in return.

 

But Pakistan, whose $66 million worth of exports to India in the eight months to November were dwarfed by imports of $315 million.

 

Islamabad fears freer trade could only deepen the deficit.